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Philip Morris (PM) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Philip Morris (PM) closed at $72.09 in the latest trading session, marking a -0.87% move from the prior day. This change lagged the S&P 500's daily gain of 0.06%. Meanwhile, the Dow gained 0.16%, and the Nasdaq, a tech-heavy index, lost 0.13%.

Heading into today, shares of the seller of Marlboro and other cigarette brands had lost 11.8% over the past month, lagging the Consumer Staples sector's loss of 1.57% and the S&P 500's loss of 2.95% in that time.

PM will be looking to display strength as it nears its next earnings release. In that report, analysts expect PM to post earnings of $1.37 per share. This would mark a year-over-year decline of 4.86%. Meanwhile, our latest consensus estimate is calling for revenue of $7.67 billion, up 2.18% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.21 per share and revenue of $29.91 billion, which would represent changes of +2.16% and +0.95%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for PM. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PM is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, PM is currently trading at a Forward P/E ratio of 13.97. This valuation marks a premium compared to its industry's average Forward P/E of 10.78.

It is also worth noting that PM currently has a PEG ratio of 1.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PM's industry had an average PEG ratio of 1.39 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 30, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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